CAPTRUST - Capital Trust

📊 NSE: CAPTRUST 🏢 Finance & Investments 📅 Last Updated: 12/13/2025 20:42

💰 Financial Performance

Revenue Growth by Segment

Total income for H1 FY26 stood at INR 25.11 Cr, representing a significant decline compared to the FY25 total of INR 96.00 Cr. Interest income, the primary segment, contributed INR 15.03 Cr in H1 FY26 (approx. 60% of total income), while Fees and Commission income contributed INR 7.27 Cr (approx. 29% of total income). The decline is driven by a strategic reduction in the unsecured MSME loan book.

Geographic Revenue Split

Operations are geographically concentrated with 96% of business originating from six states as of September 30, 2024. Bihar represents the largest single-state exposure, though the company operates a total network of 250+ branches across 10 states, primarily in Hindi-speaking regions of Northern India.

Profitability Margins

The company reported a Net Loss of INR 34.22 Cr in H1 FY26, compared to a Profit After Tax of INR 1.29 Cr in H1 FY25. This downturn is attributed to a massive 4,200% increase in impairment provisions, which rose from INR 0.41 Cr in H1 FY25 to INR 17.54 Cr in H1 FY26 as the company front-loaded losses to transition its business model.

EBITDA Margin

Core profitability is currently negative due to the strategic shift; Operating Profit before working capital changes was INR -16.68 Cr in H1 FY26. ROTA (Return on Total Assets) was 1.6% in FY24 and 1.3% in H1 FY25, but has since turned negative following the aggressive provisioning in Q2 FY26.

Capital Expenditure

The company successfully closed a Rights Issue of INR 23.8 Cr on November 11, 2025, which was oversubscribed 1.33 times. Additionally, INR 8 Cr was infused in Q1 FY25 to bolster the capital base for the new Gold Loan segment and digital expansion.

Credit Rating & Borrowing

The company maintains an 'Adequate' liquidity profile with a Negative outlook from CARE Ratings due to asset quality stress. Borrowing costs are high, with some digital business loans priced at a 32% interest rate to borrowers. Gearing was 3.0x as of September 30, 2024.

⚙️ Operational Drivers

Raw Materials

Not applicable as CAPTRUST is a financial services provider; its primary 'raw material' is capital/debt, which constitutes 100% of its lending capacity.

Import Sources

Not applicable; capital is sourced from domestic Indian banks (54% of borrowings in FY23) and private financial institutions.

Key Suppliers

Key lenders and partners include Suryoday Small Finance Bank (for BC partnerships) and various private institutions that provide 52% of current borrowings.

Capacity Expansion

Current infrastructure includes 250+ branches. Expansion is focused on converting existing branches to handle Secured Gold Loans, with the first 2 branches already operational in Western UP and Delhi, crossing INR 0.75 Cr in disbursements in the first month.

Raw Material Costs

Finance costs (cost of borrowing) were INR 7.58 Cr in H1 FY26, representing 30% of total income. This is a decrease from INR 19.17 Cr in FY25, reflecting a reduced debt load as the company repays long-term borrowings.

Manufacturing Efficiency

Turnaround time (TAT) for repeat borrowers was reduced by 40% through full integration with India's Account Aggregator ecosystem, enhancing digital lending efficiency.

Logistics & Distribution

Distribution is handled through 250+ physical branches and a digital lending platform. Employee benefits expense, a proxy for distribution cost, represents 55% of total income in H1 FY26.

📈 Strategic Growth

Expected Growth Rate

15-18%

Growth Strategy

CTL is executing a 'Strategic Shift' from unsecured MSME lending to a lower-risk, higher-velocity model. This includes launching Secured Gold Loans, expanding Micro Loans Against Property (targeting a 50:50 mix with digital loans), and leveraging BC partnerships with banks like Suryoday SFB to grow off-book AUM (which was 71% of total AUM in March 2023).

Products & Services

Micro Finance Loans (MFL), Micro Enterprise Loans (MEL), Micro Business Loans (MBL), Secured Enterprise Loans (SEL), Secured Gold Loans, and Micro Loans Against Property.

Brand Portfolio

Capital Trust Limited (CTL).

New Products/Services

Secured Gold Loans (launched Oct 2025) and Micro Loans Against Property are expected to contribute 50% of the digital portfolio revenue in the medium term.

Market Expansion

Focusing on Western UP and Delhi for the initial Gold Loan rollout, utilizing the existing 250+ branch network in rural and semi-urban Hindi-speaking regions.

Market Share & Ranking

Mid-sized NBFC; currently undergoing consolidation and scale-down of on-book assets to improve RoA visibility.

Strategic Alliances

Active Business Correspondent (BC) partnership with Suryoday Small Finance Bank across 47 branches; co-lending partnerships with 5 entities.

🌍 External Factors

Industry Trends

Digital finance is growing at a 35% CAGR (2020-2024). The industry is shifting toward 'Scale-Based Regulation' by the RBI, which imposes stricter capital adequacy and liquidity buffers on NBFCs.

Competitive Landscape

Faces intense competition from banks and fintechs like Paytm, BharatPe, and Lendingkart, which have forced a 40% improvement in CTL's digital turnaround times.

Competitive Moat

Durable advantages include a 40-year operating history and an extensive 250+ branch network in underserved rural markets. Sustainability depends on successfully migrating this network from unsecured to secured lending.

Macro Economic Sensitivity

Highly sensitive to inflation and rural economic health, as borrowers are primarily small businesses and individuals in semi-urban areas.

Consumer Behavior

Shift toward digital, paperless, and personalized loans; CTL responded by integrating with the Account Aggregator ecosystem.

Geopolitical Risks

Low direct impact; however, socio-political intervention in micro-lending (e.g., loan waivers or local regulations) remains an inherent industry risk.

⚖️ Regulatory & Governance

Industry Regulations

RBI Scale-Based Regulation (SBR) framework and a 5% cap on First Loss Default Guarantee (FLDG) for digital lending partnerships limit the risk CTL can offload to fintech partners.

Environmental Compliance

Not a primary cost driver for NBFC operations.

Taxation Policy Impact

Effective tax rate impacted by deferred tax assets; the company recognized a deferred tax credit of INR 8.70 Cr in H1 FY26 due to reported losses.

Legal Contingencies

The company faces inherent risks from the 'legacy portfolio' (JLG model) which was severely impacted by demonetization; INR 82.88 Cr of this portfolio was written off in FY23 to address asset quality stress.

⚠️ Risk Analysis

Key Uncertainties

Asset quality of the new digital portfolio is a major uncertainty; 90+ dpd rose from 0.02% in March 2021 to 2.53% in June 2022, a 125x increase in delinquency rates.

Geographic Concentration Risk

96% of revenue is concentrated in 6 states, with Bihar being a primary market, creating high vulnerability to state-specific regulatory or economic shocks.